Marc Dreier

On May 11, 2009 Marc Stuart Dreier (born May 12, 1950), an American lawyer pleaded guilty to eight charges: to one count of conspiracy to commit securities fraud and wire fraud, one count of money laundering, one count of securities fraud and five counts of wire fraud in a scheme to sell $700 million in fictitious promissory notes. Each of the counts carry maximum penalties of 20 years in prison, except the conspiracy count, which carries five years. Since December, 2008, Dreier has been implicated in a massive investment fraud case which allegedly began in 2004. He was the sole equity partner of the dissolved law firm, Dreier, LLP.

Civil charges filed in December, 2008 by the U.S. Securities and Exchange Commission, are pending.

Early life, education, and career milestones

Dreier grew up on the South Shore of Long Island, in an affluent area known as the Five Towns. His father, a Polish immigrant, owned a chain of movie theaters. Dreier presided over the Lawrence High School student council, and graduated "most likely to succeed". He graduated from Yale University in 1972 with a Bachelor of Arts, and earned a Juris Doctor from Harvard Law School in 1975. He began his career as a "shining star" in the late 1970s at Rosenman & Colin, Freund, Lewis & Cohen, then a 90-lawyer litigation firm, and was well regarded. "He was a very smart, hard-working guy....Funny, personable -- part of the social mix," but what most distinguished him was his ability to think on his feet. "He's very quick. Very smart."

In the early 1980s, Dreier was named a partner at Rosenman. In 1987, he married a Rosenman associate named Elisa Peters. Their son, Spencer, was born in 1989, and their daughter, Jackie, three years later. He and his wife separated in 2000, around the time that Dreier broke with a partner and started his own firm.

In 1989 he joined the New York office of Fulbright & Jaworski. Dreier would become co-head of litigation in New York -- but the firm noted in a statement released after his arrest that at the time Dreier left Fulbright, in March 1995, there were only ten New York litigators.

He worked for Duker & Barrett, for less than a year. (Its founding partner William Duker would later plead guilty to four counts of fraud called "one of the most serious cases of legal fraud" ever prosecuted.)

In 1996 he joined up with a Florida lawyer named Neil Baritz, who had a small corporate and securities practice, to found a firm called Dreier & Baritz, a precursor to Dreier LLP in 1996, but struggled to distinguish his practice.

From 1999-2002, Dreier, Baritz & Federman was formed and would have offices in New York, Boca Raton, with most associates in Oklahoma. Dreier would run the new firm's already leased Park Avenue office. Dreier favored plaintiff class-action lawsuits, which brought in large revenue. Federman had problems with Dreier's spending and his managerial style and secrecy, which culminated in a lawsuit.

Dreier pushed to impress, acquiring expensive trappings. He and his wife had owned a house in Westhampton; he bought a place in Quogue, and then the house next door. He bought the $18 million 121 foot yacht, Seascape, with a crew of 10, and a Jacuzzi and docked it in New York and St. Martin. Dreier owned a waterfront home in the Hamptons, a Manhattan triplex and leased a penthouse on Ocean Avenue in Santa Monica, California. He maintained a Mercedes 500 in New York, an Aston Martin in California. He dated beautiful women. He was considered a "bon vivant" who belonged to the Harmonie Club and participated continuously in high profile charity events.

Dreier LLP

He founded his own firm in 1996 that now has offices in five cities. He promised lavish compensation and attracted the best and the brightest lawyers. The headquarters at 499 Park Avenue had $30 million to $40 million worth of art, including works by Picasso and a Warhol depiction of Jacqueline Kennedy Onassis.

Dreier operated like a business and not a partnership. Mr. Dreier was the sole equity partner owner and controlled all of the firm's finances and handled all administrative functions. There was no executive committee and no partners meetings. All deals were structured so that only he knew all the specifics and had access to all accounts. Dreier convinced lawyers that such an arrangement was best by emphasizing that it would allow them to concentrate on law, while he worried about running the firm. He hired lawyers on three-year contracts, fixing their salary and paying bonuses based on the fees each lawyer brought in. According to court filings, some lawyers received more than $50,000 in salary every two weeks.

In 2007, Mr. Dreier expanded to Los Angeles and brought in Hollywood superstar lawyer Larry Stein, whose clients included the Olsen twins and Hilary Duff. The expansion boosted Dreier LLP's revenue to $90 million in 2007 from $60 million in 2006, according to court filings.

Mr. Dreier had his two children on the payroll and spent $10-million of the firm's money at New York's Gagosian Gallery in 2008.

At the end of January 2009, Michael J. Plonsker and Yakub Hazzard, co-chairs of Dreier's entertainment practice, and Mark D. Passin, together with associates Lauren Sudar, Rori Starr Silver, Jeanine Percival Wright, and staff joined the Los Angeles offices of Robins, Kaplan, Miller & Ciresi, a 250 plus lawyer firm based in Minneapolis, with offices in Atlanta, Boston, Los Angeles, and Naples, Florida. The group, a newly formed Entertainment and Media practice for the Robins firm, represents a significant element of the Entertainment and Media practice of Dreier Stein Kahan Browne Woods George in Santa Monica, California.

In March, 2009, the law firm, Fox Rothschild acquired Pastore Osterberg, a firm in Stamford, Connecticut, founded by Dreier attorneys in late 2008. Joe Pastore and Eric Osterberg will join along with seven other Dreier attorneys. They will focus on litigation telecommunications, technology, securities and intellectual property.

Traub, Bonacquist & Fox

In September, 2006, Dreier acquired a well-known bankruptcy law firm Traub, Bonacquist & Fox. Founding member and managing partner, Paul Traub, participated in several of the largest retail bankruptcies of the past several years, including Kmart Corp., FAO Schwarz Inc., KB Toys Inc., Stage Stores, and eToys.com. Traub became a Dreier partner, and co-chair of the bankruptcy practice.

Traub's former partner was Tom Petters in Ubid, PGW and Fingerhut. On December 1, 2008, Petters was charged with 7 counts of mail fraud, 3 counts of wire fraud, one count of conspiracy to commit mail and wire fraud, and one count of money laundering for selling fake security notes. His trial date is September, 2009.

On March 1, 2005, Traub confessed to supplying 17 or more false affidavits and Willful Intent to Deceive the Court between March, 2001 and December, 2002. His firm paid Barry Gold, CEO of eToys, four payments of $30,000 prior to placing him within eToys at a salary of $40,000 per month with a future promise of a bonus. The Department of Justice US Trustee's office stipulated that the acts by Traub were deliberate, rather than inadvertent and concluded that Traub's action had perpetrated aFraud upon the Court. Subsequently, the DOJ Trial Attorney, Mark Kenney, offered a Stipulation to Settle, voiding a court ruling to Disgorge, based upon the Fraud. Traub's own deposition and testimony proved that the attorney for the Debtors and the attorney for the Creditors (Traub) collaborated and provided Traub's paid associate, Barry Gold, an executive employment position with eToys by subterfuge, through the submission of false affidavits. Barry Gold, failed to disclose to the Court a conflict of interest that he and Paul Traub, of Traub, Bonaquist & Fox were partners before Gold became eToys CEO.The Department of Justice inexplicably gave Traub implied immunity and has failed to prosecute this public corruption matter. The Traub/Gold company was named ADA/Asset Disposition Advisors, LLC, and was located at the same address as Paul Traub's firm.

The New York Supreme Court case docket, EBCC1, Inc. v. Goldman Sachs Case No. 601805/2002, has a preponderance of the filings sealed. Traub and his partner, Barry Gold, continue to be in charge, although Traub admitted to the Court that he was retained by an intentionally False Affidavit. . It has been disclosed that Bankruptcy Judges often make illegitimate rulings, and that career US Attorneys are intimidated to remain silent.

On December 5, 2008, Traub sent a letter to clients announcing he and other bankruptcy lawyers had resigned from the firm, but would continue to practice together as their former partnership, Traub, Bonacquist & Fox LLP. “In light of recent developments, of which we were unaware until yesterday, we have resigned from Dreier LLP, effective immediately,” the letter states.

In February, 2009, EpsteinBeckerGreen brought the seven-member Traub/Dreier bankruptcy team into their New York office: Paul Traub, Steven E. Fox, Wendy G. Marcari and Maura I. Russell; and associates Brett J. Nizzo, Anthony B. Stumbo and Bradford Tobin. The firm has 400 attorneys based in eleven US cities.

The fraud/moneylaundering schemes of Dreier and Petters, Traub's other partners, would have been mitigated if Traub had not been given preferential treatment and immunity with a wink and a nod in the eToys Fraud matter. Despite having no statute of limitations, there has not been any credible and proper Department of Justice investigation and prosecution of the illegal and fraudulent acts upon the Court in the case.

Sheldon Solow

From 1998-2006, Dreier handled much litigation for Sheldon Solow, a billionaire real estate dealmaker. The most recent case was the unsuccessful eviction of Bank of America Securities LLC from his flagship Manhattan building, 9 West 57th St., on the dubious grounds that one of the bank's brokers had been accused of illegal trading.

In 2000 Solow decided to litigate for ownership a $10 million oceanfront house in East Hampton. Peter Morton, co-founder of the Hard Rock Cafe restaurant chain, had signed a contract to purchase the home from Dr. Gary Feldstein. Solow tried to break their contract and buy the place himself. Years of litigation ensued. Dreier filed suits in state courts in Manhattan and Suffolk County, in federal court in both the Eastern and Southern Districts of New York, in bankruptcy court in Florida, and in several corresponding appellate courts. "He had a certain glibness, this certainty that he could get away with that which other lawyers couldn't," says Feldstein's lawyer, Kevin Smith, whom Dreier named as a defendant in one of the suits. "He was like Gatsby without the charm." In 2003, the 2nd U.S. Circuit Court of Appeals, citing their "extensive history of persistent, repetitive, and vexatious litigation," ordered Solow and Dreier to pay double costs to Morton and Feldstein. The litigation cost Solow an estimated $6 million in legal fees, much of it going to Dreier.

In February 2004, advertisements labeled "legal notices" ran in The New York Times and the New York Post. The bogus ads, a costly embarassment, informed "all unsecured creditors" in developer Peter Kalikow's 1994 Chapter 11 reorganization that they "might have additional rights of recovery" because of Kalikow's failure "to make truthful disclosure." More than 50 calls and 18 faxes came in to the Evergence Capital Advisors, Inc., by creditors. Evergence was a defunct Florida corporation run by Kosta Kovachev, a Belgrade-born, onetime Morgan Stanley broker facing SEC charges for his alleged participation in a $20 million Ponzi scheme, for which he ultimately paid the SEC $358,148 in penalties and interest. The Evergence phone and fax numbers went directly to telephone lines at 499 Park Ave. -- the offices of Dreier, LLP. It was Dreier who had purchased the newspaper ads, using Evergence and Kovachev as a front. And after Manhattan federal bankruptcy court Judge Burton Lifland, who oversaw Kalikow's bankruptcy, (and who is presiding in the Madoff Investment Scandal bankruptcy) ordered Dreier to disclose his client's identity: Solow had hired Dreier to place the ads. Lifland ordered Dreier and Solow, to pay about $300,000 in sanctions to Kalikow.

In November, 2008, Dreier allegedly claimed that Solow was looking to raise $500 million by selling short-term, high-interest notes which audit report, Dreier had allegedly forged. The report had been used to try to dupe a hedge fund, Whippoorwill Associates, into buying bogus Solow Realty promissory notes. On October 15, Fund managers, who had bought $115 million of the notes in 2006 or 2007, had demanded the meeting at Solow's offices when they weren't repaid on schedule. Dreier arranged it with Kovachev, posing as Solow's controller. In October 2008, Dreier allegedly sent a Connecticut hedge fund's managing director documents that he said were Solow's audited financial statements, and the fund bought a forged $25 million note, for $13.5 million. Dreier allegedly sent a New York hedge fund the same documents he'd given the Connecticut fund, but portfolio managers wanted more information. Dreier forwarded four e-mails that purported to be from other funds that had purchased Solow notes, as well as a Dreier LLP opinion letter vouching for the notes. A portfolio manager subsequently asked to speak directly to someone at Solow Realty. Dreier scheduled a conference call for Oct. 23, and provided a telephone number located in the conference room at Dreier LLP's offices in Stamford, Connecticut. Kovachev allegedly got on the phone, and, pretending to be Solow CEO Steven Cherniak, answered questions about the notes and Solow's finances. The next day the hedge fund bought about $100 million in notes. Both the Connecticut and New York funds were dubious and brought their doubts to Solow Realty and its audit firm. In November, one hedge fund manager told Dreier that he'd called Solow Realty, and copied him on an e-mail to Solow about the notes. Solow's attorneys subsequently contacted federal authorities, that Mr. Dreier might be engaged in financial fraud.

Client list

More than 200 creditors have filed a total of more than $450 million in claims. Eton Park Capital Management seeks over $84 million, and Fortress Credit Opportunities, part of Fortress Investment Group, has filed a $61.9 million unsecured claim. Ex-law partner Bruce F. Bronster is seeking $767,000, and entertainment attorney, Lisa Bonner is claiming $448,365.

More than 800 pages of clients were named as "creditors holding unsecured non-priority claims", and have been filed in a New York court include Bill Cosby, Tim Burton, Justin Timberlake, the music groups the Virgins, the Dead Trees and the Black Angels, production company Monkey Dog Music, Harry Connick, Jr., Elvis Costello, Jon Bon Jovi, Diana Krall, 50 Cent, Echo & the Bunnymen and companies representing the Doors, the B-52's and the Ramones. Sports figures include baseball players Andy Pettitte and Sammy Sosa, tennis star Maria Sharapova and hockey player Kevin Weekes, teams Manchester United F.C. and the New York Mets and the Major League Baseball Players Association.

In March, 2008 Dreier sued client, Judith Regan, claiming she owed the firm, fees in connection with her $100 million defamation and breach of contract suit against her former employer, News Corp.’s HarperCollins Publishers LLC. On Dec. 9, Regan claimed Dreier tried to extort a settlement from her and improperly disclosed her $10.75 million settlement with HarperCollins.

The Criminal fraud case

Guilty Plea

On May 11, 2009, Marc Dreier read a statement, “I engineered a scheme to issue and sell fictitious promissory notes purportedly issued by companies in the United States and Canada,” and subsequently pleaded guilty of swindling $380M USD from various hedge funds by selling worthless financial instruments without any plea agreement with the government.

The United States Securities and Exchange Commission has also filed a separate civil suit against him for stealing funds from an escrow account belonging to one of the firm's bankruptcy clients.

An amended indictment on March 17, 2009 added an eighth count of money laundering to the charges, and $700 million in forfeitures. From 2004 to December 2008, Dreier "sold to funds and others approximately $700 million worth of Fake Developer Notes and Fake Pension Plan Notes." The Case Number is: S1 09Cr085.

The eight-count indictment states his deception began in 2004, that Dreier gave the purchasers of his notes false financial statements; arranged meetings for investors with people who impersonated officials from purported issuers of the notes; sold fake promissory notes purportedly issued by a Canadian pension plan; and embezzled more than $ 400 million from his client escrow account.

Dreier may also be facing criminal charges in Canada for impersonating an in-house lawyer at the Ontario Teachers' Pension Plan in connection with a sale of financial instruments worth $44.7 million USD. He was released on bail, only to be arrested again by U.S. authorities upon returning to New York.

Free on bail

At his plea hearing on May 11, 2009, Judge Rakoff said, “He has disgraced the honorable profession of law....There are 100 good reasons why Mr. Dreier should be jailed. By his own admission here today, he has shown that he is to be ranked with those who have committed some of the most egregious frauds in history.” Ultimately, the Judge ruled that Dreier remain free on bail pending his sentencing hearing on July 13, 2009.

Dreier had been initially released on bail on February 13, 2009. On February 5, 2009 U.S. District Judge Jed Rakoff in Manhattan had written in a brief that a total of 10 conditions set for the release Marc Dreier, "will be sufficient to reasonably assure the defendant's appearance in court as required." He issued a formal bail order on February 9, 2009, to be freed on $10 million bond, under 24-hour house arrest with armed guards and electronic monitoring. Judge Rakoff noted prosecutors had demonstrated, for the limited purposes of bail, that Mr. Dreier "is not only a master of deceit and a doyen of dishonesty, but the kind of person who, under stress, may resort to desperate measures" and his motive to flee was "palpable." but the bail package proposed by Mr. Dreier's lawyers "goes far to minimize this risk." The bond would be co-signed by his son and mother, holding them responsible if Mr. Dreier were to flee. He also ordered that all means of communication, other than a land-line telephone needed for electronic monitoring, be removed from Mr. Dreier's apartment and that no visitors would be allowed without approval from the government.

In a letter to the magistrate judge opposing bail, Assistant U.S. Attorney Jonathan R. Streeter had said, Dreier is "exceptionally deceptive, brazen, creative and resourceful in achieving his criminal goals."

On January 22, 2009, U.S. Magistrate Judge Douglas Eaton had modified his earlier ruling and set bond at $20 million dollars, requiring Dreier to secure bail with $10 million in cash or property and include at least four co-signers, who would be required to pay the money if Dreier flees. Dreier also would have to submit to electronic monitoring and see a psychiatrist twice a week. He had asked to be freed on a $10 million bond and subject to electronic monitoring. He said his mother and his 19-year-old son, Spencer would co-sign the bond.

Eaton told Shargel, "These are really extraordinary facts. His behavior was reckless, clever, improvising. Frankly, it suggests a mental disorder."

Kosta S. Kovachev

On December 23, 2008, Kosta S. Kovachev, 57, was arrested and charged with one count of wirefraud, conspiring with Dreier to sell fictitious promissory notes. In 2006, he lost his broker's license from the National Association of Securities Dealers after being implicated in a $28 million Ponzi scheme. He refused to cooperate with investigators then and eventually paid more than $350,000 penalties and interest to settle the matter, without admitting wrongdoing.

On April 22, 2009, Kovachev appeared for his arraignment on the new charges, conspiracy to commit securities fraud, securities fraud and wire fraud. It also adds a forfeiture allegation seeking to obtain money placed by Kovachev in four different bank accounts. Kovachev waived indictment and entered a plea of not guilty. Kovachev posed as a finance staff member of a real estate developer in a meeting with employees of one hedge fund and in communications and related meetings with employees of a second hedge fund. Kovachev impersonated the CEO of the real estate developer in a conference call with a third hedge fund and took questions about fictitious financial statements Dreier had sent. Kovachev was paid $115,000 from the Dreier firm’s operating account and $100,000 from its attorney trust account.

On December 4, 2008, while Dreier was in a Canadian jail attempting to move cash out of the law firm’s accounts, Kovachev appeared the law firm to pick up three paintings. There were only two paintings, and Mr. Kovachev took them and left.

The Case Number dated December 18, 2008 is: USA v. Kosta S. Kovachev, 08 MAG 2792

Assets

The assets of Dreier LLP and its affiliates have been frozen by court order. A Statement of Financial Affairs, filed on February 16, 2009, with the Southern District of New York U.S.Bankruptcy Court, disclosed that Dreier LLP has $59 million in assets and $42 million in liabilities, some $30 million of which is owed to creditors holding secured claims. In 2008, salaries for contract partners ranged as high as $1 million or more. Dreier, the firm's sole equity partner, received more than $4 million, and $27,000 was paid to his 19-year-old son, Spencer. The figures are based on an unaudited copy of the firm's books and records.

A 10 page list of property filed with the Court some of which includes: 5 bank/investment accounts; Boats: “Seascape,” 2005 Hessen Motor Yacht, 2008 Novorunia Equator Yacht Tender, Yamaha Waverunners (4); Cars: 2007 Aston Martin, DB9 Volante, 2006 BMW 650i convertible, 2000 Mercedes Benz S500 Sedan, 1997 Mercedes Benz SL500 Roadster; More than 100 works of Art: “Chair with Book on Red Carpet," David Hockney; “First Painting with Bottle,” Roy Lichtenstein; “Blue Jackie,” “White Jackie,” “Jackie Profile Looking Down,” Andy Warhol; “Portrait of a Girl,” Pablo Picasso; “Grand Masque,” Henri Matisse; “Big Thief,” Tom Otterness, and a 2006 high-definition, Salma Hayek video by Soho photographer Robert Wilson; Real Estate: New York City condominium 151 E. 58th street; Hamptons homes: East Quogue (2), Sag Harbor; Anguilla, West Indies condominium (2).

After his arrest, Dreier attempted to transfer the two properties in theHamptons worth a total of US$12.5 million to his son, Spencer. Spencer asked the caretaker of the properties to file papers claiming the father in October signed over interest in the properties as a reward, because the son agreed to spend the summer with him. The caretaker declined to do so.

Chapter 11 bankruptcy

Mark Pomerantz of the law firm Paul, Weiss, Rifkind, Wharton & Garrison is the court-appointed receiver for Dreier LLP. On December 16, Pomerantz filed for Chapter 11 bankruptcy on behalf of the firm, declaring that "no effective management" exists at the firm in the wake of Dreier's arrest. Dreier was the sole equity partner of the firm. The firm owes malpractice insurance carrier Chubb Group of Insurance Companies more than $213,000 in unpaid bills by December 31, 2008, otherwise the $10 million insurance policy would expire and leave Dreier's 240 or so lawyers without coverage.

On March 26, 2009, Pomerantz disclosed he has recovered more than $100 million in assets, including $39 million in art; an $18 million, 121-foot yacht; homes in Manhattan; three properties in the Hamptons east of New York; parcels in Anguilla owned by Dreier or his family members; and five cars. Dreier bought the yacht through the sale of fake notes. Dreier held stock certificates in an office safe and stakes in a company called People Capital and a startup bio-diesel firm in Argentina. He also controlled an investment vehicle called Armada Partners. However, “large amounts” may not be collectible. Pomerantz's firm will be billing $1.4 million for its services.

On March 26, 2009, an auction held at the law office sold most of the firm's furnishings and accoutrements at rock bottom prices, with the exception for Mr. Dreier's furniture and paintings.

The case is United States v. Dreier 08-mag-2676 U.S. District Court for the Southern District of New York (Manhattan).

Chapter 7 Involuntary bankruptcy

Sheila Gowan, the trustee overseeing the liquidation of the law firm, filed a Chapter 7 involuntary bankruptcy petition for Dreier on January 26, 2009. Wachovia Bank National Association and the bankruptcy estate of 360networks Inc also joined Gowan in the involuntary petition as creditors. The three said they are owed about $88.5 million.

Fortress Investment Group LLC, a private-equity and hedge-fund manager, lost $125.7 million buying phony promissory notes issued by Solow Realty & Development Co.. Elliott Management Corp., a hedge-fund firm lost $101.1 million. Eton Park Capital Management LP, lost $84.4 million; Perella Weinberg Partners, $46 million; Concordia Advisors LLC, $22.3 million; Novator, $20 million; and Meyer Ventures LLC, $13.4 million.

Dreier owes more than $40-million to various creditors, including many of its own lawyers.

Chapter 7 Trustee Salvatore LaMonica, who’s in charge of Dreier’s bankruptcy case in the personal liquidation proceeding initiated by several creditors, is seeking bankruptcy court permission to hire an auctioneer to sell off Dreier's three properties, the Upper East Side apartment, and the two neighboring properties in the Hamptons.

Event Timeline

• May 12, 1950 - Date of Birth
• 1972 - Graduates with B.A. from Yale University.
• 1975 - Graduates with J.D. from Harvard Law School.
• 1984 - Joins Rosenman, Colin, Freund, Lewis & Cohen.
• 1989 - Moves to Fulbright & Jaworski.
• 1995 - Joins Duker & Barrett.
• 1996 - Forms Dreier & Baritz with Neil Baritz of Boca Raton, Florida.
• 1998 - Takes on as a client Sheldon Solow, a New York real estate developer.
• 1999 - Firm is renamed Dreier, Baritz & Federman with addition of William Federman of Oklahoma.
• 2001 - Federman and Dreier dissolve their relationship.
• 2002 - Baritz leaves the firm. Federman sues Dreier over client escrow funds the matter ultimately settles.
• 2003 - Dreier LLP grows to some 30 lawyers, with Dreier functioning as the sole equity partner. He pays the bills but also has control over at least 12 client escrow funds.

Dreier moves aggressively over the next few years to bring a number of affiliates under his umbrella, opening offices in Stamford, Conn., Albany, New York, Pittsburgh, Los Angeles and Santa Monica, Calif.

• 2004 - Drier LLP increases to 50 lawyers.

Dreier begins marketing promissory notes supposedly issued by Solow Realty & Development Co. to various hedge funds and investment funds. The "notes" pay between 8 percent and 12 percent interest with terms of between one and two years. In several instances, Dreier provides fake financial statements, backed up with forged letters purportedly issued by the accounting firm Berdon LLP.

• 2006 - Dreier LLP increases to 100 lawyers.
• September, 2006 - Traub, Bonacquist & Fox joins Dreier. Paul Traub becomes partner, and co-chair of the bankruptcy practice.
• 2007 - Dreier LLP grows to 175 attorneys.
• 2008 - Firm peaks at 250 lawyers.
• October 15, 2008 - Dreier walks into the offices of Solow Realty at 9 West 57th St. with Kosta Kovachev. The pair use a conference room to present Kovachev as a top Solow official and reassure two hedge fund managers about their investment in the promissory notes.
• Oct. 23, 2008 - Kovachev and Dreier use a law firm conference room in Stamford, where Kovachev impersonates a Solow executive on the phone and helps to seal the sale of $100 million in notes to a hedge fund.
• November, 2008 - Thomas Manisero, a partner at Wilson Elser Moskowitz Edelman & Dicker, representing Berdon LLP, confronts Dreier in a phone call, saying he believed Dreier forged an audit report in an effort to dupe a hedge fund into buying more fictitious Solow notes.
• Dec. 1, 2008 - A bankruptcy partner tells Dreier, who is in Canada, and the firm's controller that a $38.5 million payment is due a client, 360networks Corp. The controller finds the escrow accounts have only $19 million.
• Dec. 2, 2008 - Dreier is arrested in Toronto by Canadian authorities for criminal impersonation after he pretends to be a lawyer with the Ontario Teachers' Pension Fund, which he claims was guaranteeing the notes he was trying to peddle to another hedge fund.

News of his arrest sparks emergency partnership meetings and attorneys affiliated with the firm begin jumping ship.

• Dec. 7, 2008 - Dreier is arrested after returning to the United States and hires veteran defense attorney Gerald Shargel.
• Dec. 8, 2008 - Dreier makes his initial appearance in the Southern District on one count each of securities fraud and wire fraud. Shargel makes it clear the case will not go to trial, intimating that his client will plead guilty within months.

The Securities and Exchange Commission files a civil suit against Dreier.

• Dec. 11, 2008 - Assistant U.S. Attorney Jonathan Streeter says the size of Dreier's fraud is $380 million and growing. Citing "an enormous risk of flight," Magistrate Judge Douglas F. Eaton refuses to authorize bail.
• Dec. 16, 2008 - Citing "an accelerating onslaught" of demands from creditors, clients and attorneys, court-appointed receiver Mark F. Pomerantz files for Chapter 11 bankruptcy protection for Dreier LLP.
• Dec. 22, 2008 - Kovachev is arrested and charged with conspiracy to commit wire fraud for his impersonation.
• Dec. 23, [[2008] - The Appellate Division, First Department, suspends Dreier from the practice of law "on the basis of uncontroverted evidence of serious professional misconduct.
• Jan. 22, 2009 - Magistrate Judge Eaton agrees to set bail conditions, but they are so tough that Shargel says his client has been "effectively" denied bail.
• Jan. 29, 2009 - Dreier is indicted for defrauding investors of more than $400 million. The case is assigned to Judge Jed. S. Rakoff.
• Feb. 5, 2009 - Judge Rakoff sets bail conditions that include confinement monitored by a 24-hour armed guard at Dreier's penthouse at 151 E. 58th St.
• Feb. 13, 2009 - Dreier is released from the Metropolitan Correctional Center.
• March 17, 2009 - A superseding indictment includes new charges against Dreier. An accompanying forfeiture allegation seeks to recover $700 million - the amount of fake notes the government says Dreier sold to investors.
• April 22, 2009 - Streeter and fellow prosecutor Raymond Lohier file a new criminal information against Kovachev alleging he was paid $215,000 from Dreier LLP accounts to impersonate the Solow executive and perform other tasks. Kovachev pleads not guilty.
• April 27, 2009 - Shargel announces at a hearing that Dreier intends to plead guilty to all eight counts in the indictment.
• May 11, 2009 - On the eve of his 59th birthday, Dreier pleads guilty.

- compiled by Mark Hamblett, The American Lawyer

External links

• Biography of Dreier from his law firm, Dreier LLP
• Dreier, LLP Chapter 11 Bankruptcy Filing
• Dreier, LLP Assets and Liabilties Statement, Schedules E,F,G,H
• Dreier Amended Criminal Complaint, March 17, 2009
• Fortune Magazine Profile of Marc Dreier, April 1, 2009
• "Lawyer Seen as Bold Enough to Cheat the Best", New York Times (December 14, 2008)
• Update on Dreier from AmLaw Daily
• Martha Graybow, "Dreier Law Firm in Turmoil After Founder's Arrest", Reuters (December 10, 2008)